Aerosol-induced increase of relative dispersion of cloud droplet size distribution <i>ε</i> exerts a warming effect and partly offsets the cooling of aerosol indirect radiative forcing (AIF) associated with increased droplet concentration by increasing the cloud droplet effective radius (<i>R</i><sub><i>e</i></sub>) and enhancing the cloud-to-rain autoconversion rate (<i>Au</i>) (labeled as dispersion effect), which can help reconcile global climate models (GCMs) with the satellite observations. However, the total dispersion effects on both <i>R</i><sub><i>e</i></sub> and <i>Au</i> are not fully considered in most GCMs, especially in different versions of the Community Atmospheric Model (CAM). In order to accurately evaluate the dispersion effect on AIF, the new complete cloud parameterizations of <i>R</i><sub><i>e</i></sub> and <i>Au</i> explicitly accounting for <i>ε</i> are implemented into the CAM version 5.1 (CAM5.1), and a suite of sensitivity experiments is conducted with different representations of <i>ε</i> reported in literature. It is shown that the shortwave cloud radiative forcing is much better simulated with the new cloud parameterizations as compared to the standard scheme in CAM5.1, whereas the influences on longwave cloud radiative forcing and surface precipitation are minimal. Additionally, consideration of dispersion effect can significantly reduce the changes induced by anthropogenic aerosols in the cloud top effective radius and the liquid water path, especially in Northern Hemisphere. The corresponding AIF with dispersion effect considered can also be reduced substantially, by a range of 0.10 to 0.21 W m<sup>−2</sup> at global scale, and by a much bigger margin of 0.25 to 0.39 W m<sup>−2</sup> for the Northern Hemisphere in comparison with that fixed relative dispersion, mainly dependent on the change of relative dispersion and droplet concentrations (Δ<i>ε</i> / Δ<i>N<sub>c</sub></i>).